Goldman Says Pandemic Is Shaping a More Productive U.S. Economy
Goldman Says Pandemic Is Shaping a More Productive U.S. Economy
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The Covid-19 pandemic is fueling a productivity boost for the U.S. economy by speeding up workplace digitization, according to an analysis by Goldman Sachs Group Inc.
Since the crisis began, annualized growth in output per hour has risen 3.1%, compared with 1.4% in the previous business cycle, Goldman economists wrote in a note. “Stronger productivity growth has been one of the silver linings of the pandemic,” they said.
Those gains are most visible in sectors that can take advantage of virtual meetings, and where in-person expenses such as travel and entertainment have scope to decline. The gains are being led by sectors including information technology, professional services and wholesale trade, while online shopping has lifted productivity in the retail sector.
Figuring out how to boost productivity among workers and companies is often identified as one of the biggest obstacles for global growth.
The ability to work from home has been singled out as one area where gains are obvious, with a recent study estimating a productivity lift in the U.S. economy of 5%, mostly because of savings in commuting time. However, that study found gains were disproportionately available to the highly educated and well-paid, with many lower-paying jobs -- such as in food preparation and other essential industries -- unable to be done remotely.
In their analysis, the Goldman economists said that even once workplaces fully reopen and workers resume regular service, productivity gains aren’t likely to be unwound.
“If gains from workplace digitization are indeed sustainable, the reopening of corporate office buildings and the face-to-face economy should not be associated with a pause or reversal of these trends,” they wrote.
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